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• The students will be able to have a basic understanding of a company’s working capital structure.
• Understand how proper management of working capital increase profits
• Have an understanding of the various Working capital management policies
• Calculate the cash conversion cycle
• Establish knowledge of working capital in the budgeting process and credit policy
Concept & Significance
Concept of working capital, Significance of working capital, Determinants of working capital, Operating cycle, Estimation of working capital, Risk-return trade-off of working capital, Working capital policies: Current asset policy and financing policy, Working capital financing,
meaning, Tools and technique of inventory management, EOQ, Various levels of inventory, inventory control (ABC and VED analysis);
Cash management: Meaning, Objectives/Motives of holding cash, Determinants of cash needs and method for determining cash needs (Baumol Model and Miller-Orr Model).
credit policy variables, evaluation of alternative receivable policy, collection policy, cost of receivables,
1. I M Pandey-Financial Management-Vikash
2. Prasanna Chandra- Financial Management-TMH
3. Khan and Jain-Financial Management-TMH
4. Sudhindra Bhatt- Financial Management-Excel
Students must look into the Annual Report of ITC attached herewith.
i.They have to look into the Current Assets and Current Liabilities position of the Company and find out the ratios relevant to Working Capital.
ii.They should go to the notes on accounts (which are numbers given against the items of assets and liabilities ) and verify these for last five years to find out the changes in them .
iii.They should analyze the Changes in working Capital on the Profitability of the Company.
iv.They should Compare these with that of any other Company of Similar nature.
vi.Students can log into the site http://www.annualreports.com/Company/bce-inc where they can find 72,000 annual reports of 5,800 Companies.
Students must look into the Annual Report of Infosys attached herewith.
I.They have to look into the Current Assets and Current Liabilities position of the Company and find out the ratios relevant to Working Capital for last five years.
II.It is interesting to note that Infosys don’t have any long-term loans over last few years and they have very less short-term loans. Students should go to the notes on accounts (which are numbers given against the items of assets and liabilities ) and verify these for last five years to find out the changes in them .
III.Students should analyze the changes in working capital and should prepare a report how it affects their profitability and turnover.
IV.Students have to prepare a report on how the Current Assets and Liabilities position of an IT Company (which is a service provider company) is different from that of an FMCG Company.
V. They should Compare these with that of any other Company of Similar nature.
VI.Students can log into the site http://www.annualreports.com/Company/bce-inc where they can find 72,000 annual reports of 5,800 Companies.
Studying the Inventory Management System of any Organisation(e.g.UMBC or GTET and suggesting changes required if any to improve profitability)
Comparing Reports of Various Committees relating to Working Capital Finance(Tandon Committee, Chore Committee and Dahejia Committee ) and analysing these reports.
Assignment on finding the Maximum Permissible Bank Finance as per the Various Methods.
Assignment on LIFO,FIFO,HIFO and Weighted Average Method